2025 FSA Contribution Limit
For 2025, the FSA Contribution Limit is $3,300 (Health FSA salary reduction limit) and $660 (Maximum carryover).
Effective 2025-01-01Source: Rev. Proc. 2024-40 (IRS)Verified 2026-08-29
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Health FSA salary reduction limit | $3,200 | $3,300 | +$100 (+3.1%) |
| Maximum carryover | $640 | $660 | +$20 (+3.1%) |
Who it applies to
The limit reaches an employee who funds a health flexible spending arrangement through an employer's cafeteria plan by electing voluntary salary reductions for a taxable year beginning in 2025. It is written as a dollar limitation on those salary reductions, so it is stated per employee rather than per household or per plan. The $660 figure applies only where the cafeteria plan itself permits the carryover of unused amounts; a plan that offers no carryover is not given one by the revenue procedure. Rev. Proc. 2024-40 publishes the adjusted amounts and does not restate the eligibility or election rules that § 125 sets out.
What changed this year, and why
For taxable years beginning in 2025, Rev. Proc. 2024-40 sets the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements at $3,300. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $660. Both are inflation-adjusted items, generally determined by reference to § 1(f). The revenue procedure states the 2025 items for Code provisions as in effect on October 22, 2024, and adds that if amendments to the Code are enacted for 2025 after that date, taxpayers should consult additional guidance to determine whether these adjustments remain applicable.
Common questions
- How much can I contribute to a health FSA for 2025?
- For taxable years beginning in 2025 the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,300. That is the ceiling on what an employee may elect to divert from pay into the arrangement for the year. Rev. Proc. 2024-40 states the figure as an inflation-adjusted item and sets no different amount for any filing status.
- What is the health FSA carryover limit for 2025?
- If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $660. That cap sits separately from the $3,300 salary reduction limit: the salary reduction limit governs what you elect during the taxable year, while the carryover figure governs how much of what you did not spend the plan may move forward. Rev. Proc. 2024-40 states both figures in its cafeteria plans item.
- Does every health FSA allow a carryover?
- No. Rev. Proc. 2024-40 states the $660 maximum carryover conditionally, applying it if the cafeteria plan permits the carryover of unused amounts. The revenue procedure does not require a plan to offer a carryover and sets no amount for a plan that offers none. Whether unused money moves forward is a feature of the plan document the employer adopted, not something the inflation adjustment grants.
- Which tax year does the $3,300 FSA limit apply to?
- Rev. Proc. 2024-40 states the figure for taxable years beginning in 2025, and its general effective date rule in section 3 applies the revenue procedure to taxable years beginning in 2025. Cafeteria plans are not among the items the procedure routes instead to its calendar year rule. The limit therefore attaches to a taxable year beginning in 2025, not to the date on which any individual salary reduction happens to be withheld.
- Where does the $3,300 health FSA limit come from?
- It is the dollar limitation in § 125(i) of the Internal Revenue Code, as adjusted for inflation. Rev. Proc. 2024-40 publishes the adjusted amount for 2025 in its cafeteria plans item, and the procedure says the inflation-adjusted items it sets out are generally determined by reference to § 1(f). The figure is the statute's own indexing rule applied, not a discretionary number chosen each year.
- Is the health FSA limit per employee or per household?
- Rev. Proc. 2024-40 states it as a dollar limitation on voluntary employee salary reductions, so it is expressed per employee for the taxable year. The revenue procedure gives no separate household figure, no separate figure for a married couple, and no combined ceiling covering spouses who each fund an arrangement through their own employer's cafeteria plan. Anything beyond the per-employee limitation is not something this document states.
- Does the $3,300 limit cover a dependent care FSA?
- No. The figure Rev. Proc. 2024-40 sets is the § 125(i) limitation on voluntary employee salary reductions for contributions to health flexible spending arrangements. Dependent care assistance sits under a different Code section, and it is not among the 2025 adjusted items listed in Rev. Proc. 2024-40. Treating the health figure as though it also governed a dependent care election would read the document for something it does not say.
- Can the 2025 health FSA amounts change after they are published?
- Rev. Proc. 2024-40 sets the 2025 items for Code provisions as in effect on October 22, 2024. It states that if amendments to the Code are enacted for 2025 after that date, taxpayers should consult additional guidance to determine whether these adjustments remain applicable. The $3,300 and $660 figures therefore describe the law as it stood on that date rather than a promise about the whole year.
Every amount on this page is a published figure rather than yours. The Health FSA headroom takes the number you enter and works it out against them, showing which published figure it used.
Self-employed people cannot have a health FSA
A health FSA is an employer-established benefit plan, typically offered as part of a cafeteria plan alongside other employer-provided benefits. Because the plan is established by an employer, only employees of employers that offer such a plan can participate. Self-employed persons aren't eligible for FSAs. This means that if you are self-employed - for example, a sole proprietor, an independent contractor, or a partner in a partnership - you cannot set up a health FSA on your own. However, if you are an employee of a company that offers a health FSA, you may elect to participate regardless of your self-employment income from another activity. Employers have flexibility in designing their plans and may offer various combinations of benefits, so not every employer offers an FSA. Even if you are eligible, certain limitations may apply if you are a highly compensated participant or a key employee under the employer's plan.
Health FSAs are employer-established benefit plans. These may be offered in conjunction with other em- ployer-provided benefits as part of a cafeteria plan. Em- ployers have flexibility to offer various combinations of benefits in designing their plans. Self-employed persons aren’t eligible for FSAs.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
You elect once a year and cannot change it at will
At the start of each plan year, you choose how much to contribute to your health FSA through a salary reduction agreement with your employer. Your employer then deducts that amount from your paycheck in regular installments throughout the year. Once made, the election is essentially locked in for the entire plan year. You cannot change or revoke your election unless specifically allowed by law and the plan, such as after a qualifying life event like marriage, birth of a child, or a change in employment status. This irrevocability is what distinguishes FSAs from other savings vehicles and ensures the plan maintains its tax-advantaged status under the Internal Revenue Code.
At the beginning of the plan year, you must designate how much you want to contribute. Then your employer will de- duct amounts periodically (generally, every payday) in ac- cordance with your annual election. You can change or re- voke your election only if specifically allowed by law and the plan.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The whole election is available on day one
Under a health FSA, the full amount you elect to contribute for the year is available to reimburse you for qualified medical expenses from the very first day of the coverage period, even if you have only contributed a small fraction of that amount through payroll deductions so far. You must be able to receive the maximum amount of reimbursement at any time during the coverage period, regardless of the amount you have actually contributed. This is known as the "spend-before-you-fund" feature. For example, if you elect to contribute $3,300 for the year and you incur a large medical expense in January after only a few paychecks of contributions, the plan can still reimburse you up to the full $3,300 election amount. The maximum amount you can receive tax free is the total amount you elected to contribute to the health FSA for the year. This rule makes FSAs particularly useful for covering large, anticipated medical costs early in the plan year.
You must be able to receive the maximum amount of reimbursement (the amount you have elected to contribute for the year) at any time during the coverage period, regardless of the amount you have actually contributed. The maximum amount you can receive tax free is the total amount you elected to con- tribute to the health FSA for the year.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
Use it or lose it, and the two escapes from it
Health FSAs are subject to the "use-it-or-lose-it" rule, which means that amounts remaining in the account at the end of the plan year generally cannot be carried over to the next year and are forfeited. However, the IRS permits plans to offer one of two relief mechanisms to soften this harsh result. First, the plan can provide for a grace period of up to 2 1/2 months after the end of the plan year, during which qualified medical expenses incurred in that extended period can be paid from any amounts left in the account at the end of the previous year. Second, the plan may allow a carryover of unused amounts, up to a maximum carryover of $660 remaining at the end of the plan year to be used for qualified medical expenses incurred in the following plan year. A plan can offer one of these options but not both. Your employer is not permitted to refund any part of the balance to you in cash.
FSAs are generally “use-it-or-lose-it” plans. This means that amounts in the account at the end of the plan year can’t generally be carried over to the next year. However, the plan can provide for either a grace period or a carry- over. The plan can provide for a grace period of up to 2 1/2 months after the end of the plan year. If there is a grace period, any qualified medical expenses incurred in that period can be paid from any amounts left in the account at the end of the previous year. Your employer isn’t permitted to refund any part of the balance to you. Plans may allow up to $660 of unused amounts remain- ing at the end of the plan year to be paid or reimbursed for qualified medical expenses you incur in the following plan year.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
What the money may be spent on, and what it may not
Distributions from a health FSA may be used only to reimburse you for qualified medical expenses incurred during the coverage period. Qualified medical expenses generally include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. This includes expenses for you, your spouse, and your dependents. However, there are specific expenses that cannot be reimbursed from an FSA. You can't receive distributions from your FSA for amounts paid for health insurance premiums, amounts paid for long-term care, or amounts that are covered under another health plan. Over-the-counter medicines and menstrual care products are considered qualified medical expenses. Expenses that have already been reimbursed under another health plan cannot be claimed again. Understanding these boundaries is essential to avoid taxable distributions and potential penalties.
You can’t receive distributions from your FSA for the fol- lowing expenses. • Amounts paid for health insurance premiums. • Amounts paid for long-term care. • Amounts that are covered under another health plan.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2024-40 (IRS)
- Health FSA salary reduction limit
the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,300
- Maximum carryover
the maximum carryover amount is $660